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PPC raises budget for Zimbabwean expansion projects by US$280m

Zimbabwe’s largest cement firm, Pretoria Portland Cement, has raised its capital spending budget on expansion projects to about US$280m. These expansion plans will be achieved by backward integration in a phased approach. PPC will spend US$80 million on building a cement mill in Harare to be commissioned in 2016.

This additional spending will increase PPC’s capital spending budget by about 30% from the original $200m. Last year, the company announced a capital expenditure budget of US$200 million to construct a clinker plant in Mt Darwin and a cement mill in Tete Province, Mozambique. The new Harare cement mill is expected to boost operating efficiencies for the company, which is also planning to close less efficient mills at its Bulawayo factory.

First, PPC will construct the 100 tons per hour cement mill (or 700 000 tons per annum) in Harare for US$80m to be commissioned in 2016. This will be followed by construction of a clinker plant and a mill at a cost of US$200m. The Harare mill will be funded by a corporate loan to be secured against PPC Zimbabwe’s balance sheet. The modern efficient mill in Harare gives a competitive advantage and phased capital expenditure approach reduces risk.

In 2013, PPC announced its intentions to invest in a US$230m factory in the Democratic Republic of Congo (DRC). Located 20km from Kimpese in the western DRC, the greenfield project includes the construction of a one million ton per annum cement factory and associated quarry.

PPC Ltd operates in emerging markets, where 70% of the world’s cement is produced. These markets are largely characterised by higher growth in populations, GDP and cement demand.

PPC Ltd. is the leading supplier of cement in Southern Africa and also produces aggregates, metallurgical-grade lime, burnt dolomite and limestone. PPC Ltd has eight cement manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe that can produce around eight million tons of cement products each year.

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